MUNICIPALITY OF ANCHORAGE Benefit and Retirement Plans For 2014 Page 1
Table of Contents 2014 Health Plan Summary...Error! Bookmark not defined. Opt-out Program FAQs... 4 2014 Premium Rate Table...Error! Bookmark not defined. Benefits:... 6 Retirement:... 8 MOA Voluntary Retirement Plans (401(k) & 457)... 9 Page 2
2014 Health Plan Summary Options PPO 1300/2600 Plan Co-Pay 1000 Plan 500 Plan Individual Annual Deductible $1,300* $1,000 $25 for the first 6 nonpreventive office exams per $500 calendar year, per person Family Annual Deductible $2,600* Aggregate* $3,000 $1,500 Coinsurance 20% after deductible 20% after deductible 20% after deductible Hospital PPO Requirement Yes Yes Yes Individual Annual Out-Of- Pocket Maximum Penalty for Using Non-PPO Hospital in Non-Emergency Prescription Drug Providence Alaska is our preferred hospital $5,000 Individual $10,000 Family Including deductible Penalty N/A. Allowable Charges paid at 60% after deductible Participant pays all upfront pharmacy costs. After medical deductible has been met, Plan reimburses 80%. $2,000 co-payment (after deductible) Deductible plus claim paid at 60% of allowable charges $2,000 co-payment (after deductible) Deductible plus claim paid at 60% of allowable charges Preventive Care 100% 100% 100% Retail Generic - $7.50 Tier 2 - $15.00 Tier 3 50% to $75 cap Mail Order (90 day supply) Generic - $15.00 Tier 2 - $30.00 Tier 3 50% to $150 cap Retail Generic - $7.50 Tier 2 - $15.00 Tier 3 50% to $75 cap Mail Order (90 day supply) Generic - $15.00 Tier 2 - $30.00 Tier 3 50% to $150 cap Prescriptions are not subject to the medical deductible and do not count towards the medical plan out-of-pocket limits (exception: PPO 1300/2600 plan which is subject to medical deductible) When a generic drug is available and you choose to use the brand name drug, you will be responsible for the copay as well as the additional cost between the generic and brand name drug Mail Order Prescriptions cost 10% to 30% less than retail pharmacy prices. Dental Plan Annual Deductible $25 per year on Type B and Type C Services Annual Maximum $1500 per year Coverage Sealants 50% of allowable charges; lifetime maximum of one application per tooth per person Type A Preventative Services co-payment = zero (100% covered) Services Type B Basic Services co-payment = 20% Type C Major Services co-payment = 50% Plan pays 100% of allowable charges for an examination each calendar year; pays 100% of allowable charges up to $200 per enrollee for hardware per year. (Frames, lenses, prescription Vision contact lenses). Care PPO1300/2600 One exam and one pair of lenses per calendar year, one frame per two calendar years, subject to 20% coinsurance. Not subject to deductible. Audio Care Audio Care Plan pays 80% of allowable charges for covered audio expenses up to $500 every 3 years PPO 1300/2600 One exam, hearing test, hearing aid per 3 calendar years subject to 20% coinsurance; Limited to $800 per three calendar years. Page 3
Opt-out Program FAQs Q: What is the opt-out program? A: Opt-out is a program that allows Non-reps, Executives and Unions as applicable who have alternative health insurance to waive medical insurance coverage under the Municipal health plan and receive a financial incentive. Proof of other current and effective health coverage must be provided. Q: Why Opt-out? A: If you have dual health insurance, you may not be receiving any additional benefit that justifies your additional cost for premiums. Employees who opt-out of the MOA health plan receive a financial incentive. Q: What is the MOA opt-out contribution? A: The financial incentive is $350 per month, which is $175 semi-monthly. It is a bit more than the amount you would take home if you selected the highest deductible plan currently available. Q: Who is eligible for the opt-out election? A: The pilot program is available to Non-Reps, Executives and AMEA who are eligible for the Municipal health plan. Success, continuation and expansion of the program are based on participation experience. Q: What is the process to opt-out? A: It s simple. As part of your 2013 benefits New Hire, you can select Opt-out as your health plan. Then, you continue through your other benefit decisions and elections as usual. Your MOA opt-out contribution may be used to offset your other benefit costs with any excess paid to you as taxable income. Q: Can I opt-out at other times of the year, or only in conjunction with open enrollment? A: If there are changes in your health benefit coverage from outside sources, such as your spouse s plan, they would be treated as a qualifying family event. Qualifying family events allow you to change coverage any time during the year. To discuss your particular situation, you may contact Benefits staff. Q: What proof is needed if opt-out is elected? A: You will need to provide a letter from the alternate provider and/or employer validating current and effective coverage. Proof must be received within 30 days of hire. Q: Can I opt back in to the health plan? A: Outside of the open enrollment period, you can only change your health coverage election if you lose coverage through a qualifying event. Re-entry into the plan will be the first of the month following the qualify event upon receiving proper documentation. Page 4
2014 Benefit Rate Structure Health Plan Total Monthly Premium MOA Benefit Contribution Employee Cost Share Per Month Payroll Deduction 500 Plan $1,921.72 $1,818.00 $103.72 $51.86 Co-Pay 1000 $1,882.12 $1,818.00 $64.12 $32.06 1300/2600 with HSA* $1,637.98 $1,818.00 $0.00 $0.00* 1300/2600 with FSA* $1,637.98 $1,818.00 $0.00 $0.00* Opt Out $0.00 $350.00 $0.00 $0.00 *the MOA benefit contribution exceeds the total premium for the 1300/2600 Plan, resulting in an excess of $180.02 per month. This amount will be deposited into a Health Savings Account (HSA) or Flexible Spending Account (FSA) Voluntary Supplemental Life and AD&D Insurance Plan Monthly Cost $25,000.00 $6.14 $50,000.00 $12.26 $75,000.00 $18.38 $100,000.00 $24.50 $125,000.00 $30.64 $150,000.00 $36.76 $175,000.00 $42.88 $200,000.00 $49.00 Voluntary Short Term Disability Plan Monthly Cost $300 Weekly Benefit $24.60 $500 Weekly Benefit $41.00 60% of weekly earnings to a maximum of $1500 $1.35 per $100 of covered payroll Page 5
Benefits: Health Insurance Plans are available to all eligible regular full and/or part-time employees scheduled to work at least 20 hours per week. The Municipality of Anchorage offers Health, Life, AD&D, Dependent Life, Short Term Disability, Long Term Disability, Public Employee Retirement System (PERS) Retirement, and optional retirement savings programs to eligible employees. Proof of relationship is required within 30 days of hire. The cost for benefit premiums exceeding the Municipal contribution will be deducted from your paycheck semimonthly on a pre-tax basis. Premiums that are less than the Municipal contribution, if any, may be refunded to the employee. Administrative Fee: There is a plan administrative fee of $2.50 per pay period for all eligible participants unless otherwise stated. Per bargaining unit agreement, the Municipality of Anchorage pays the administration fee for APDEA, IAFF and Plumbers. Eligible dependents are covered at no additional cost. Dependent children may be covered up to age 26. The Municipality of Anchorage offers Health Insurance coverage to Same Sex Domestic Partners. An affidavit is required to meet the eligibility requirements. The Affidavit will need to be filled out by you and your Same Sex Domestic Partner, then signed and stamped by a Notary Public in and for Alaska. There are potential tax implications to the employee when adding a domestic partner. If you have questions, please consult your tax advisor. In order to enroll a dependent, you must provide proof of relationship documentation for each dependent (i.e., original marriage certificate, Affidavit, birth certificate, adoption paperwork signed by the court, as well as a social security number) within 30 days from your date of hire or appointment to an eligible position. Your original documents will be verified and returned to you and a copy kept in your personnel file. If you fail to provide legal documentation of proof of relationship, your dependents will not be covered under the Municipal health insurance plan. You may enroll them during the next open enrollment period which is held once each year. Changes made during open enrollment, become effective the first day of the New Year. Qualifying Events: It is the employee s responsibility to notify Benefits of a qualifying event or a Family Status Change within 90 days of the event and to fill out an enrollment form with appropriate documentation. Outside of the open enrollment period, you may only add, change or discontinue coverage for yourself and/or eligible dependents within 90 days of a qualifying event. The event must be a qualifying event to be eligible to change benefit options at a time other than annual benefit open enrollment. Once you have chosen your benefits for the year, no changes are allowed until the next year s open enrollment period unless one of the following changes in family status occurs. Marriage or divorce Birth or adoption of a child or appointment as foster parent Termination or commencement of your spouse s employment A change of your or your spouse s employment from full-time to part-time or part-time to full-time, resulting in a change in benefits coverage. Death of a covered family member Note: You must complete a Medical Enrollment form and provide written documentation within 90 days of the event before the dependent(s) can be added to your coverage, failure to do so will result in waiting until open enrollment. If a dependent is no longer eligible for coverage, you are responsible for notifying Benefits within 60 days of the qualifying event, for the ineligible dependents to be offered COBRA insurance. Page 6
Life Insurance: Based on your bargaining unit agreement, you may have different employer paid life insurance benefit. Employee Paid Supplemental Life Insurance Choices: Supplemental Life Insurance is available in increments starting at $25,000 up to a maximum of $200,000. IBEW employees can elect supplemental life insurance up to one times their annual salary up to $50,000. For the following bargaining units, here is the employer paid life insurance benefit: AMEA: 50,000 NON-REPS/EXECS: 50,000 IAFF: 200,000 PLUMBERS: 50,000 APDEA: 200,000 Sworn TEAMSTERS: 50,000 APDEA: 50,000 Non Sworn MECH: 50,000 IBEW: salary to the next $1,000 with max of $50,000 You will have 30 days from your initial date of hire or appointment to an eligible position to change any of your elections. After your 30 days you will not have the opportunity to enroll again until open enrollment and may only enroll or increase your coverage level, if you have completed an Evidence of Insurability form which has been approved by the insurance carrier. If the insurance carrier does not approve the Evidence of Insurability, you will not be allowed to increase your life insurance coverage. Dependent Life Insurance: (Optional) Dependent life insurance costs $.80 per month regardless of the number of dependents enrolled in this plan. This insurance covers the lives of your spouse and qualified dependent children. Coverage for dependents is a maximum of $5,000 for each dependent. You will have 30 days from your initial date of hire; appointment to an eligible position; or 90 days from a change in Family Status to enroll eligible dependents. After that period of time you may only enroll dependents in dependent life insurance at open enrollment if you have completed an Evidence of Insurability form and it has been approved by the insurance company. If the insurance company does not approve the Evidence of Insurability, you will not be allowed to enroll your dependents for dependent life insurance. Short Term Disability: (Optional) Short term disability coverage insures you for a disability that is not work-related. Work-related injuries are covered under Workers Compensation. Weekly disability payments can be made whether you are on paid or unpaid leave. Payment for disabilities that occur due to an accident or hospitalization may be paid from the first day of the disability. Payment for disabilities that are due to an illness without hospitalization requires a 15-day waiting period before benefits may be paid. Short term disability insurance is available in increments of $300, $500 per week or 60% monthly base salary (Maximum Benefit is $1,500 per week) for eligible participants. Benefit payments are taxable. Benefits will continue to be paid for the length of the disability to a maximum of 39 weeks. You will have 30 days from your initial date of hire or appointment to an eligible position to enroll in Short term disability. If you fail to enroll you will not have the opportunity to enroll again until open enrollment and waiting periods will be applied to the new coverage level. Long-Term Disability: The Municipality of Anchorage provides Long-Term Disability Insurance in the event of a disability that lasts 40 weeks or longer, an employee is eligible to receive 60% of his or her salary, up to a maximum of $6250 monthly. Page 7
Employee Assistance Program: The Municipality of Anchorage provides a discretionary Employee Assistance Program. This service is a confidential, free counseling and referral service for eligible employees, their qualified dependents, and persons living in their household. Retirement: State of Alaska Public Employee Retirement System (PERS): The Municipality of Anchorage participates in the State s PERS Pension/Retirement System. The State of Alaska is the administrator for the PERS program and is responsible for the plan rules. http://doa.alaska.gov/drb/ P.O. Box 110203, Juneau, AK 99811-0203 P: 1.800.821.2251 PERS Participation and Contributions Summary: Participation is mandatory for all eligible regular full time employees and for regular part-time employees scheduled to work at least 15 hours per week. PERS Tiers o Employees in the PERS system prior to July 1, 2006 (Tier I, II, III) participate in the Defined Benefit Plan (DB Plan). o Employees hired into the PERS system on or after July 1, 2006 (Tier IV) participate in the Defined Contribution Plan (DC Plan). Contributions o The employee and employer contribute to the retirement fund on a bi-weekly basis. o The employee DB Plan's contribution for 2012 is 6.75% of gross PERS eligible salary on a pre-tax basis. Police Officers and Firefighters in the DB Plan contribute 7.5%. The Municipality contributes 22%. o The DC Plan's employee contribution for 2012 is 8.0% of gross salary on a pretax basis. The Municipality contributes 22%, of which 5% is the employer match to the DC retirement, and the remaining 17% is invested by the retirement fund for employees future retirement benefits (such as the PERS Retirement Health Plan, a Health Reimbursement Account, Death and Disability, and the remaining posted to the Unfunded Liability account). Earnings/Investments o The employee s DB Plan s contributions earn interest (4.5% per year, compounded semi-annually). o The employees DC Plan s contributions may be invested in any of the available investment options offered by the DC Plan. o The Municipality s contributions are invested by the retirement fund for employees future retirement benefits. Vesting o Employees are 100% vested in employee contributions. o You become vested in the Defined Benefit Plan Retirement after 5 years of service in a PERS position with a PERS participating employer (State of Alaska, UAA, Anchorage School District, Alaska Court System, or other.) Vesting in Medical coverage at retirement is based on original date of hire into a PERS position, from 5 to 10 years of service depending on the Tier. o You are vested in the 5% employer match to the Defined Contribution Retirement Plan on a graded schedule: 25% after 2 years of service, 50% after 3 years, 75% after 4 years, and 100% after 5 years. Retirement Age Eligibility o Normal Retirement Age varies depending on when you were first hired into a PERS position. Page 8
MOA Voluntary Retirement Plans (401(k) & 457) Employees have access to participation in voluntary savings plans offered by the Municipality of Anchorage under the 401(k) Savings Plan and the 457 Deferred Compensation Plan. See the following section for a summary comparison of the some of the main features of each of the plans. SUMMARY COMPARISON OF THE MUNICIPALITY OF ANCHORAGE VOLUNTARY 401(k) AND 457 PLANS Comparison Component Recordkeeper Contributions 1,2 Roth After Tax Contributions 401(k) Plan T. Rowe Price 1-800-922-9945 (Customer Service) www.rps.troweprice.com You may contribute from 1% to 100% of your net pay in before-tax and/or Roth after-tax contributions through payroll deductions, up to the maximum IRS limit of $17,500 in 2014. You can contribute up to $17,500 (in before tax and/or Roth after-tax contributions) in a calendar year. 50+ Catch-Up Provision 1 If you turn age 50 in 2014 or are older, you may contribute an extra $5,500 in before-tax and/or Roth after-tax contributions. Standard Catch-Up Provision Contributions/Changes Rollover Contributions Employer Contributions Loans None You may change your salary deferral by phone or on-line at any time. Changes take two to four weeks to become effective. You may roll over vested account balances you have from other eligible employer plans you participated in (such as 401(k), 403(b), or governmental 457 plans). APDEA only: MOA will make a matching contributions in the amount specified in the bargaining agreement. You can borrow up to 50% of your account balance, between $1,000 and $50,000. Loans have a combined limit between both plans of $50,000 in the past 12 months. You may not take more than one loan at a time. Your loan, plus interest, must be repaid within 60 months except for primary residence loans, which must be repaid in 15 years. 457 Deferred Compensation Plan Great West Retirement Services 1-800-232-0859 (Customer Service) 907-276-1500 (Local Customer Service) www.moa457.com You may contribute up to 100% of your net compensation or $17,500 in 2014 through before-tax payroll deductions. Minimum contributions to the Plan are 1% of your annual compensation, per payroll deduction. Not Available If you turn age 50 in 2014 or are older, you may contribute an extra $5,500 to your account. If you have not reached the maximum contribution in previous years, you may save up to twice the IRS limits during the three years prior to normal retirement age. The Standard Catch-Up and 50+Catch-Up cannot be used in the same calendar year. You may change your salary deferral at any time by phone or on-line. Changes will be effective the following calendar month. You may roll over vested account balances you have from other eligible employer plans you participated in (such as 401(k), 403(b), or governmental 457 plans) or traditional IRAs. None You can borrow up to 50%of your account balance, between $1,000 and $50,000. Loans have a combined limit between both plans of $50,000 in the past 12 months. You may not take more than one loan at a time. Your loan, plus interest, must be repaid within 60 months except for primary residence loans, which must be repaid in 15 years. Page 9
Comparison Component 401(k) Plan 457 Deferred Compensation Plan Ownership and Vesting Employees are immediately 100% vested. Employees are immediately 100% vested. Withdrawal Options Withdrawal Penalties Lump sum, partial payments, periodic payments. You may change your options at any time. Generally, when you take money from the plan, it is taxable (and may be subject to a 10% early withdrawal penalty if you are under age 59 ½) unless you roll it over into a Traditional IRA or another eligible employer plan. Lump sum, partial payments, periodic payments or annuities. You can combine any options and, with the exception of the annuities, you may change your option at any time. Distributions may be taken from the 457 Plan at any age upon meeting a qualifying event and are generally not subject to the 10% early withdrawal penalty before age 59 ½. Enrollment Planning Tools To enroll in the plan, contact T. Rowe Price by phone or online: After you have received your first paycheck, call 1-800-922-9945 for automated account access. Have your PIN available, or set up a new PIN through the automated system. You can speak with a representative on business days between 2 a.m. and 5:00 p.m. Alaska time. You can also visit the myretirementplan website at rps.troweprice.com. On your first visit to the site, click Register and follow the instructions. The 401(k) Plan offers easy access to free tools from Morningstar and online calculators that can help you manage your retirement account. Here are just a few tools that you can access on the myretirementplan website: Portfolio X-Ray SM Portfolio Tracker SM Budget Calculator What can I expect from Social Security? How can I meet the costs of college? You can enroll online or via paper form. For questions or forms to enroll contact Great West Retirement Services locally at (907) 276-1500. A PIN# is needed for online enrollment. To set up a PIN #, contact a customer service representative at 1-800-232-0859 between 5 a.m. and 5:30 p.m. Alaska time. Once you have established a PIN, you can access your account information via automated response system 24/7 or you can visit the website at www.moa457.com. On your first visit to the site click Guest and then click enroll and follow the instructions. The 457 Plan offers easy access to free online calculators and tools designed specifically to help you manage your retirement account. Access your Planning Tools tab and check out the tools: Reality Investing for personalized planning Online education seminars Virtual classroom for more in depth education Retired? The Retiree Crossroads for issues and information for retirees. 1 You may contribute up to the 2014 IRS annual limit of $17,500 in each plan, for a combined total of $35,000. Employees eligible to contribute to the Catch-Up provision may contribute an additional $5,500 in each plan, for a combined total of $46,000 in 2014. The actual amount you are eligible to contribute is reduced by the amount you may have already contributed to similar plans under a prior employer in the same calendar year. Employees are responsible to make sure they do not exceed the IRS limits when contributing to more than one employer sponsored plan in the same calendar year. 2 For employees participating in the PERS Tier IV, the IRS contribution limit for that plan falls under section 415(c), maximum $51,000 in 2014. The 415(c) limit refers to the employee contributions to PERS IV, currently 8%, plus the employer contributions made directly to employee s accounts, currently 5%, as well as all contributions to the 401(k) and the Money Purchase Plan. Contributions to the 457 Plan, or PERS Tiers I, II, or III are not included in the 415(c) limit. Page 10